Tuesday, March 26, 2013

Stockton Bankruptcy Case Begins

DETAILS OF STOCKTON'S SITUATION
Monday the City of Stockton went to court in Sacramento to ask permission to file Chapter 9 bankruptcy.  Opponents say the City did not cut enough spending nor did it seek a tax increase to avoid this move.  You can read a report from KCRA.com and view a news clip HERE.  You can also read a Reuters news account HEREThere is also a Huffington Post entry from last July to provide some perspective HERE.  There is also an excellent essay titled "How would Stockton bankruptcy cut pensions?" by Ed Mendel dated 1/17/13 HEREAnd, there is a summary of the bankruptcy timeline from the Stockton web site HERE.


WHY DO WE CARE?

So, what's the big deal, you ask?  After all, Stockton got itself into this trouble by, according to that Huffington Post report, a spending binge.  Why should we Costa Mesans care about what happens up there?  Well, I'll tell you why.

MISREPRESENTATIONS
For the past two years plus now-mayor Jim Righeimer and his loyal band of OC GOP sycophants have been screaming about Costa Mesa's terrible fiscal condition and using that misrepresentation to attempt to completely destroy the very fabric of our city.

BOGUS OUTSOURCING SCHEME
They used that bogus argument as the cornerstone of their scheme to outsource nearly half of the city staff two years ago, going so far as to completely ignore their own policies.  That arrogant disregard for the rules of the game led to a lawsuit that is still in play today.

DEMONIZED EMPLOYEES
In their haste to disenfranchise employees represented by associations - Righeimer has fought "unions" most of his adult life - they tried to demonize the employees and turn public opinion against them.  That backfired.

CHARTER FIASCO
They used the bogus fiscal calamity as their platform for Measure V, Jim Righeimer's Charter scheme - the one that went down to a resounding defeat last November when the voters finally had a chance to opine on the issue.  And that only happened when a diverse core of residents banded together to form  Costa Mesans For Responsible Government and mount a concerted opposition to the scheme.  And, of course, it helped that Righeimer and his cadre were so arrogant that they misplayed their hand a couple times as they tried to rush his charter onto the primary ballot in June.

CHANTING THE PARTY LINE
The mantra now is "unfunded pension liability" - not a small issue, to be sure.  OC GOP Chairman Scott Baugh told the world that Costa Mesa is "ground zero" for pension reform in California.  However, after leading the chorus on this issue for two years, Righeimer has recently stated that he's not going to send another penny to CalPERS to reduce that liability, citing the makeup of the CalPERS board as a bunch of union hacks and unqualified partisans - mocking the current President of the CalPERS board as a "glazier".

CALPERS DEBT
Righiemer now offers NO solution to the "elephant in the room" - as described in one of the reports above - the CalPERS debt.  He has stated more than once recently that he fully expects CalPERS to implode and that he doesn't want another cent of Costa Mesa money to be part of that crisis.

BANKRUPTCY!
Short of CalPERS crashing, there is only one way for Costa Mesa to get out of that debt - municipal bankruptcy.  So, that leaves me wondering just what Righeimer has in mind.  Is he setting our city up to fail?  He seemed to try very hard to keep the city from balancing the budget the past couple years by adding some of his pet projects to the mix.  That failed when the folks who actually do the work - the excellent city staff - found ways to make it work.

CHOPPED PUBLIC SAFETY TO THE BONE
Righeimer and his cronies have cut the public safety staffing to near-calamitous levels.  Just a few short years ago the Costa Mesa Police Department had 164 sworn officers, including some who were part of the AirBorne Law Enforcement Program (A.B.L.E.) - the model for all other municipal helicopter programs around the country.  They unilaterally decided to disband A.B.L.E., leaving our partner, Newport Beach, and our contract city, Santa Ana, to scramble for air support.  Now those cities and Costa Mesa are being provided marginal air support by Huntington Beach - and that program is on shaky ground.

FEWER COPS EQUALS MORE CRIME
Today the authorized strength of the Costa Mesa Police Department is 131 sworn officers, and includes 5 "grant officer positions" that will disappear in a couple years.  Righeimer and his supporters will say, "Yeah, but we've got more non-sworn officers today."  OK, but we had THOSE positions before, but they were sacrificed due to budget problems during the economic downturn that began late in 2007.  The impact of those cuts is a dramatic increase in crime in our city, as reflected on this crime report comparing year end numbers for 2012 to 2011, HERE.

COUNCIL CREATES FIRE DEPARTMENT OVERTIME
The Fire Department - which has huge voids in senior leadership positions - has not been able to hire replacement staff because the council seems unwilling to approve and adopt Interim Fire Chief Tom Arnold's restructuring plan.  I'm told we will hear yet another iteration of it soon.  In the meantime, the clock ticks and thousands of hours of overtime by exhausted firefighters have been required to cover essential shifts.  And then the Righeimer and his cohorts shamelessly criticize the firefighters for the money they earned working those hours.

WHAT'S HIS GAME?
I think Righeimer may be trying to maneuver our city into bankruptcy - the only way he can bust the "unions" and avoid the CalPERS debt.  That is unacceptable.  He and his anti-tax pals are unwilling to even consider an increase in the Business License fees - Costa Mesa has the lowest in Orange County.  Even a modest increase would help, but a 50% increase would still place us near the bottom of the heap.  They claim a fee increase would chase businesses out of the City.   Really?  Would Nordstorm's close their South Coast Plaza store if they had to pay $300 per year instead of $200?  Give me a break!

WATCHING STOCKTON
So, we watch the proceedings in Sacramento to see if Stockton will be permitted to, in fact, enter Chapter 9 bankruptcy.  If so, watch the reaction to that event here in our town.  For most of us paying our bills is just the way things should be done.  However, that attitude is not universal on the City Council dais, where some members have a history of letting somebody else pay the bills.  We should not let that happen in our city - not when there are options that have not even been discussed.

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25 Comments:

Anonymous stuck in 8th grade said...

do you know any other word besides "sycophant". U use it daily and now the frogs also. are u "amenable" as Foley would say, to expanding your vocabulary?
CM4RG is getting farther and farther to the left judging by their facebook page. their base of sycophants needed expanding i guess and now they embrace anarchists. right sk? thanks alf, in advance, for the "well said".

3/26/2013 07:35:00 AM  
Anonymous Missile Test said...

Geoff,
As usual, with this Bankruptcy talk, you're making things up and spinning against Great Leader Sun Myung Jimbo, formerly of North Korea.

Are you implying that Jones Day, whose lawyers have contributed to great leader and General Steve Wong Bullyo, might be considered for such a monumental undertaking?

http://www.jonesday.com/experiencepractices/servicedetail.aspx?serviceid=28

3/26/2013 07:50:00 AM  
Anonymous Central Valley Farm Animals said...

Mooo! Stockton is Stevie's hometown and we need him for the bankruptcy fun. Come back dear favorite son. Costa Mesa is a bad place for you!

3/26/2013 07:53:00 AM  
Blogger The Pot Stirrer said...

Sure, but it's such a perfect word, why mess with perfection? Now, you gutless anonymous commenter, any thoughts about the premise of this post?

3/26/2013 07:54:00 AM  
Anonymous tax your way out said...

is there any question that the calpers system is broken? can we really afford to pay such high wages and benefits to police and fire while also paying a second, early retired police and fire force huge retirement benefits? I say YES, we can. Yes, we can. all we need to do is stop balancing the budget on the backs of retirees. Do we really need parks and paved streets? If so , raise everyones taxes or just have Nordstrom pay for it, they get a break on license fees don't they? Put a special tax on furniture refinishers, math teachers, retired planners, crow hunters and their sycophants and emotional wrecks who head up some froggy organization. Yes, it can be done.

3/26/2013 07:55:00 AM  
Anonymous Arthur Nern said...

Mr. West, Weren't you a head hunter in another life? Any way you can help "Duh Chairman" get better "work?" Maybe he can take Billy's place at the city. Oh, but that job involves more than just washing vehicles and Riggy's clothes..

3/26/2013 07:58:00 AM  
Anonymous succubus said...

i think sycophant is the perfect word for the minions of West. they love it and the minions need to feel good sometimes.

3/26/2013 07:59:00 AM  
Anonymous Mesa Mustang said...

Ha, love the lies and half-truths in the BC's latest post. Did anyone catch the Foxnews article on the City of Alameda County CEO and her $400k for life pension. These employees have been milking the system for years and we are too afraid to speak up.

I thank our City Council for addressing the trying to solve the problem. For those of who have kids (not the BC), we either fix this problem now or it ruins our local governments. Personally attacking those who are actually FIXING the problem is a real shame. Thank you City Council!!

3/26/2013 10:57:00 AM  
Anonymous Ron K. said...

Mesa Mustang:
"..Personally attacking those who are actually FIXING the problem is a real shame. Thank you City Council.."

Smooch smooch. People like Thrift Store Marty "attack" everyone, especially those who might have different physical features.

The council majority and its sycophants aren't fixing anything except their own advantages.

West is right on the issue. This mustang from Riggy's stable needs to go back to his barn.

3/26/2013 12:12:00 PM  
Blogger Mike H. said...

The harder the truth, the more shrill the screaming from the gutless anonymous commenters.

Is Calpers unsustainable? I'll let the numbers from another CalPensions post speak for themselves. Note the "Probability of Low Funded Status" table. That's my guide for Calpers "crashing." Unlike Our Mayor, I'm not betting on that pony.

Reform is needed. Method 5 looks like a wise middle path, for starters. Actual practice of fiscal conservatism would help, too. You know, not setting all time records for lawyers bills and buying Talbert Park or remodeling City Hall.

The other side will tell you that there's some sort of "concealing massive debt" going on in Calpers. No proof is given, of course. No matter that the 100 largest corporate pension funds project an average of 8% growth. When the other side offers up such ideas as "taxxxx da frogggs", not even knowing that's a Bill of Attainder and clearly violates the Constitution, you can guess they're not very interested in civil discourse or solutions.

Then again, what does one expect from the anonymous?

3/26/2013 01:01:00 PM  
Blogger Mike H. said...

Oh, and another little tidy fact. You may bemoan a $400k for life pension of someone in Alameda County. But you don't pay into it. Alameda County has their own retirement system and NOT in CalPERS.

Facts are your friends!

3/26/2013 01:10:00 PM  
Anonymous Tom Egan said...

Score: White Hats, 1; Black Hats, 0.

The Pot Stirrer does a thorough job of explaining the background. Then he makes logical forecasts of Righeimer’s future actions.

So what do the anonymous supporters of Righeimer do with that? Do they argue his facts and logic? No, instead they do what outclassed debaters do: they whip out well-worn rhetorical fallacies.

In short, they pound the table, as in the lawyer’s adage, “When the facts are on your side, pound the facts. When the law is on your side, pound the law. And when neither the facts nor the law are on your side, pound the table.”

The Black Hats’ favorite rhetorical fallacy is argumentum ad hominem (attack the man, not the facts or logic). Mr. Stuck in the 8th Grade uses it exclusively. So does Ms. Succubus.

A popular Black Hat fallacy is to oversimplify. They assume any governmental function can be simplified down to one or two words. For example, they say the public pension system is not complicated because it has to be right for many public entities, and it’s not susceptible to the imperfections of human judgment, they simply say, as Mr. Tax Your Way does, “it’s broken.”

Another favorite is the false dichotomy fallacy. Mr. Tax Your Way sets up only two ways, both distasteful, to address problems with public pensions and then challenges the reader to make a choice. He doesn’t admit there are other ways – for example the negotiations most other cities have used to solve their problems – to address problems.

Mr. Mesa Mustang uses the Hasty Generalization. He attempts to “prove” that the Pot Stirrer lies and tells half-truths about Costa Mesa by relating a supposed story of an Alameda County CEO with a large pension. His weak logic is, simply, Alameda County proves “we are too afraid to speak up.” He implies that PS lies, etc., because he doesn’t see the issues as Mr. Mesa Mustang does.

So, the Black Hats have huffed and puffed, but haven’t laid even a finger on Truth, Justice, and the American Way, aka the White Hats.

3/26/2013 01:52:00 PM  
Anonymous Mike McNiff said...

Consider the source - Fox News. 'Nuff said.

3/26/2013 02:35:00 PM  
Blogger Gericault said...

I also notice the first commentator attacking "the left". We have never had a "left leaning" council in my memory. I will say this . Now that the "left" has National and State control we are seeing the biggest reduction in Federal Deficits since Eisenhower and the complete turnaround of a $20 Billion dollar state deficit under Brown. Unlike when we had the "right" with Bushs's economic meltdown , billions in surplus turned to trillions in debt, and the Governators ballooning state deficit reaching over $20 billion. Facts are your friend.

3/26/2013 05:15:00 PM  
Anonymous succubus said...

to all you minions of West: watch the total payments the city has to pay into calpers skyrocket soon. this at the expense of hiring more cops to pay the retired ones. what will you say then? a big increase is coming. parcel taxes on retired folks sounds good, eh? tax em outta their homes. after all it's not all due now ridge tells us. just some huge balloon payments, we can live with that.

3/26/2013 06:39:00 PM  
Blogger Joe said...

Dear Friends,
Just in case you had any doubts, rest assured that Jones Day has very strong Bankruptcy practitioners. Surprised? Facts are your friends AND they help you discover more facts, and even make predictions.

3/26/2013 07:35:00 PM  
Anonymous Stop giving money away said...

@ succubus-- what are your thoughts about sending millions and millions to high priced law firms, and putting away a half a million dollars a year for motel acquisitions, or giving taxpayer money to football teams and high school tracks?

3/27/2013 09:08:00 AM  
Blogger kwahlf said...

Facts are our friends indeed!
That is not the case with Righeimer and his followers- the facts hurt them. That is why they avoid them.
Just look at the Chairman here, he's both stuck in 8th grade, tax your way out of it and succubus, avoiding the premise of Geoff's post like the plague.
We can learn a lot by watching the events in Stockton right now.

3/27/2013 08:29:00 PM  
Anonymous succubus said...

facts ARE friends! WELL SAID evryone. CA owes BILLIONS it will never have. We gave unsustainable pensions away like candy. thanks to all the unions and libs who run this state

3/27/2013 09:14:00 PM  
Anonymous PERS Watcher said...

succubus said...

facts ARE friends! WELL SAID everyone. CA owes BILLIONS it will never have. We gave unsustainable pensions away like candy. thanks to all the unions and libs who run this state

Correct, facts Are your friends.... "WE did not give unsustainable pensions away like candy" and it was not all the "unions and libs who run this state". It was YOUR conservative council including some who are still serving today!

Why is it that no one wants to talk about the mismanagement of the pensions by our elected officials. No, we have to blame the evil, greedy government workers. Why don't we go back and talk about the 90's and early 2000's when the pensions were super-funded. The city had the option to continue to pay into PERS and bank away the money for the future or they could pay nothing into PERS because it was self-sustaining at the time due to the high returns of the stock market. Which did they choose... hmmm I wonder..... They CHOSE to pay NOTHING and spend the money on other pet projects. Now the stock market has gone the other way and they have to play catch up. If they had continued to make the payments in the good times, they would not be trying to play catch up now. Complete and utter mismanagement on their part but it is much easier to blame someone else and demonize them than it is to admit to your own mistakes!

3/28/2013 12:39:00 AM  
Anonymous succubus said...

Pers watch: 3@50 wasn't in play. that was the killer. correct? were we really ever superfunded? or did the pension formula come home to roost a little later? it is here now, big trouble everywhere. how can you deny it?

3/28/2013 07:44:00 AM  
Blogger kwahlf said...

Succubus,
Why don't you answer 'Stop giving money away's'
question?
I'd like to hear you answer a direct question.

3/28/2013 10:09:00 AM  
Anonymous PERS Watcher said...

Succubus,

25 years ago the city of Costa Mesa was NOT a part of PERS for the PD. They had their own city funded retirement and the PD WAS 3%@50. PD had 3%@50 before almost any other city in the state. When the city joined PERS the actuarial from PERS was $30 million LESS than what the city had already set aside. Did the city give PERS the full amount they had already set aside? NO! They paid PERS and SPENT the remaining $30 million.

So to answer your question directly (something you have yet to do)is NO, 3%@50 did not kill Costa Mesa pensions. It was in play long before PERS came to the party.

Yes, the city really was super-funded.

I am not denying that there is a problem now. There is a huge problem. Where we completely disagree is "who is to blame". It is NOT the employees or the "unions". It rests completely on the shoulders of our elected representatives past and PRESENT! They completely mismanaged the money and the pensions. No one put a gun to their heads and forced them to sign the contracts. The contracts were agreed upon through legal negotiations which involved give and take.

Many times the employees gave up cash raises in lieu of increased contributions to medical, dental and retirement.

3/28/2013 01:13:00 PM  
Anonymous Disgusted Republican said...

Looks like Stockton will not be allowed to file for bankruptcy yet as they have not done enough to try to get themselves out of their predicament - like raising taxes!! So it looks like if bankruptcy is what the RIGmeister has up his sleeve he'll have to at least raise business fees, which is a no brainer anyway, which leaves one to wonder just where his is! Oh, right, he turned it in at the door when he joined the OCGOP and signed the no tax pledge.
And, suc-cubus, we're all still waiting for your answer, which will never come because you don't have one because the facts are not on your side!

4/01/2013 01:38:00 PM  
Anonymous Disgusted Republican said...

I was wrong about Stockton not being allowed to file for bankruptcy! I guess I can't even believe KFI news!

4/01/2013 06:45:00 PM  

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